Military career

[otako]

In less than a year and half, I'll be commissed into Air Force as a new 0-1. I find myself wondering whether to stay for 20 or get out in 4.

If I stay for 20, I could retire at 46.

However if I leave, I could make a lot more money in private sector.

So I have a question for ex-military out there, is the pension and chance to early retire worth the military bs you have to put up with?

[Jarhead*]

Quote:

In less than a year and half, I'll be commissed into Air Force as a new 0-1. *I find myself wondering whether to stay for 20 or get out in 4. If I stay for 20, I could retire at 46. However if I leave, *I could make a lot more money in private sector. So I have a question for ex-military out there, is the pension and chance to early retire worth the military bs you have to put up with?

The fact that the Air Force is going to commission you, they believe you have leadership qualities.
I guess it must be generational, but to call your future career, "military bs" (A future officer no less), seems way out of sync to me.
Sorry, but you hit my "hot button" on that comment.
If your main concern are your benefits, I'm sure that either Nords or GDER can answer that for you.

[Eagle43]

I did 21 years in USAF. The bennies are good, especially the healthcare benefits. Pension drops in every month, whether I need it or not, and there are also commissary, bx, and travel benefits. DW and I have traveled space available to Hawaii and St. Croix, the cost being zippo. And to reinforce my point, I will say, were it not for the Tricare benefits, I'd still be at MegaCorp.

But, if you view the military as b.s., then don't do it. You'll regret it, if you do, and there's a good chance that you will not be a success. Go out and make "the lot more" money in the private sector. You will find plenty of B.S. there. I did 22 years in Mega Corp as well, so I can compare.

[otako]

Quote:

The fact that the Air Force is going to commission you, they believe you have leadership qualities. I guess it must be generational, but to call your future career, "military bs" (A future officer no less), seems way out of sync to me. Sorry, but you hit my "hot button" on that comment. If your main concern are your benefits, I'm sure that either Nords or GDER can answer that for you.

No, I guess that was the wrong term to use. *I have to work on being more politically correct in the future. *I'm just coming from the private sector and a lot what military does seems redundant to me. *Maybe it's just the nature of government work. Crazy stuff like triple paperwork or etc. *That's what I mean about military bs.

Yes, I'm proud to serve my country. *I'll work night and day to get mission accomplished. *But, I'm not gun ho about everything we do such as triple paperwork or political stuff.*

[Leslie]

Otako--
I'm about to retire at 42 after 20 years in the AF. I wasn't necessarily intending to stay that long--but like GD-ER, I had some intriguing assignments, and pretty soon, it didn't make sense to leave. Once you're over about 10 years, you think long and hard about staying vs leaving.

There are sacrifices for sure--I spent a year remote, and some other overseas time without family, and I missed a lot. But learned a lot about life in the process, and don't regret a minute. However, I'm also not staying a minute longer than 20 years .

My advice is to "bloom where you're planted." See how your first 4 years go. While my friends outside the military made more money than me, none of them can ER at 42 like I am. I can hardly believe it myself!

Leslie

[Nords]

Geez, Jarhead, it must've been nice to serve in the only branch of the military to lack "bs". I'm sure the submarine force still has a spare pallet or two! Did you ever hear the story about a young Chesty Puller whose troops were caught "requisitioning" paint?

Otako, thank you for asking the advice of us ol' retired pharts. Despite our cynical kvetching, some of us will never give up trying to "fix" our branches of the service. And I'm shocked, I say shocked, to discover such a cynical attitude among our future 2LTs. I thought you JOs were trained to believe everything you were told and to not question our sage advice until you were at least, uhm, 1LTs.

The only way to fix the military bs is to be able to recognize it in the first place. But no one will appreciate your ability to call attention to it wherever you find it. Someone worked very hard to build that steaming pile, however aromatic it may be, and inadvertently leveling the "bs" accusation at its creator-- who may quite well be your boss-- won't accomplish your goals. The key is to incrementally remove the status quo, not to splash it around. Big changes will be resisted as too messy, while accomplishing the same goal with many small shovels will seem too reasonable to object. Technical skill without leadership & teamwork is only enough to get you to 1LT.

To further abuse this analogy, one leadership approach is to stop the flood that's rolling downhill while letting your NCOs take care of the stuff that's bubbling up. Many times "taking care of your troops" requires shielding them from the "good ideas" of your own leaders.

One of the best leadership books I've read is Norman Schwarzkopf's "It Doesn't Take A Hero". He doesn't preach, he just tells you how he handled it. He grew up with it (Dad was a flag officer) but his advice is practical & entertaining.

His best career advice is that he always regretted punching his tickets instead of chasing the fun/challenging jobs.

Two suggestions: First, take it one tour at a time. Don't memorize that 35-year career chart with the stars. (Hey, it could happen.) Just focus on your current tour and make it the best you can.

When the assignment officer calls, find the tour with the most fun & challenge (in that order). Don't go for their offer (they're salesmen with quotas) unless it personally appeals to you. Avoid shopping your resume' around to the right senior sponsors. Don't worry about location (unless you have big family problems, which will inevitably lead to conflicts) or responsibility (it'll come soon enough) or having the "right" jobs (they're not). School is always good, especially NPS or one of the war colleges, or a duty station that lets you pursue a graduate degree on your time. Don't worry about JPME unless you're absolutely fascinated by the reading list-- it'll be shoved down your throat at the right time.

Try to meet the needs of the service, but it's folly to sacrifice your mental & physical health trying to shoehorn yourself into an inappropriate job for your skills & temperament. If you and the AO can't compromise then you should seriously consider a resignation letter. While it shows the AO what type of "customer" you are, it also forces him to add something for you instead of solely for the USAF. Maybe you'll get a guaranteed follow-on tour (yeah, right) or maybe you'll get a different combination of duty/location/length that pleases everyone.

When you get to about 15 years of service, the AO's offers will assume that you're handcuffed to 20. So as you get more senior, the choices & flexibility actually deteriorate. If you don't like it as an O-3, you're gonna hate it as an O-5.

Second suggestion-- if/when you resign, join the Reserves. I've always regretted not understanding that option, and it's far better than I could have imagined. The Reserves retain all of the enjoyable things without coercive assignment officers, and you can participate as much or as little as you're able. You have far more opportunities and you even retain some of the benefits year-round.

I thoroughly enjoyed the challenges & successes of my college and the first 10 years of my career. But when we started a family, I discovered that I'd rather be a parent than a 70-hour-a-week staff officer. It also forced me to find my own career path instead of following the AO's direction, but I focused on the conflict instead of its resolution. I didn't appreciate the Reserve option and I spent over 3500 days coping with the struggle to 20. I wouldn't recommend it if your family has an appropriately higher priority than the military.

You know better than I if you can make more $$ as a civilian, and it might even be less dangerous. However the overhead costs are much higher and the "rules" seem much murkier. OTOH the Reserves gives you the potential to combine the best of both.

Good luck, and don't hang around if you're not having fun!

[newellcr]

Otako,

Just curious. Did you run the numbers to see what the retirement and health benefits are worth using future value type calculations? It will give you the "numbers" answer like GD-ER suggests. My suggestion would be to use current year dollars and work with real returns and see what kind of savings you'd need to give you the monthly income of the 20 year pension in 20 years, or the 25 year pension in 25 years... Add in an extra amount to cover the health benefits included in the retirement, maybe $10k/yr as a guess and see what you get.

There is some tremendous wisdom in the posts above. Also, there aren't too many jobs out there that don't have annoying paperwork, forms, or rules. The military does seem quite comfortable taking these to extremes, but my experience is that you will be surprised how much military bs you will see in industry. Try to make peace with doing these tasks for your own good. Resent it, try to avoid it if you can, but accept it as the price of having to work for a living. This was one of my harder lessons to learn.

Good luck!

Chris

[otako]

How much is a military career really worth? * * *

Military Pay Table - All calculations after tax * * *

Pay Table for a 20 Year Career Assuming Normal Promotion Rates - Total Benefits (Basic Pay, BAH, BAS) * * *
O1(2 Years) * * *$69,433.28
O2 (2 Years) * * *$85,768.00
O3 (4 years) * * *$200,637.00
O4 (8 years) * * *$468,211.00
O5 (4 years) * * *$291,168.00
* * *$1,115,217.28

Retirement Pay for 39 years at an 05 * * *
$1,547,488.00 * * *

GI BILL For 36 Months * * *
$36,000.00

Estimated Savings on VA loan vs conventional upfront loan on 30 year mortgage (example home price of $150,000)
$16,133.00

Estimated Savings on sales taxes (Over course of 59 years, 20 - active and 39 - retirement)
$198,594.00

Free Air Travel Overseas (Assuming cost of $1000 per ticket and one trip every three years to average lifespan of 85)
$19,666.00

Health Insurance (Assuming 2004 statistics of $14,545 for employer sponsered family health care * 59 years(20 years Active + Retirement to Average Lifespan of 85)
$858,155.00

Dental Insurance (Family Dental for 59 years)
$5,664.00

Extra 15 days of leave on a 20 year career( Assuming example income of 36k- this number is low balled on purpose - it probably worth much more as your income rises)
$29,589.00

Extra 6 holidays for 20 year career ( Assuming example income of 36k)
$11,865.00

Average saved by keeping your residence in Texas for 20 years(No State Tax and assuming income of 36k for this example)
$72,000.00

Value of Top Secret Clearance( Studies have shown that Top Secret Clearance adds additional 10% value to salary in private sector, Example 36k base salary * 37 years)
$133,200.00

Total Benefits and Pay Added Together
$4,043,571.28

[Nords]

Boy, those calculators have improved a lot. Or is that your own spreadsheet?

The healthcare number jumps right off the page!

No criticism, but some nitpicks to consider:
- I wonder if those salary numbers are indexed to the ECI, the CPI, or not at all. It doesn't seem like much (2-5%/year) but it adds up over 20.
- Hopefully that retirement number is indexed to CPI.
- I don't know anyone who used the GI bill for their master's, their MBA, or any post-career training. Not even for SCUBA cert.
- VA loans were a good deal in the 1980s era of 13% interest rates, but we've consistently done better with credit unions since then. Haven't had a VA loan since 1989.
- That sales-tax number is specious when the state tax is 4% yet you're buying at Wal-Mart/CostCo for 5% less than exchanges/commissaries.
- Family dental-- our kid's braces alone were $4K, and only about $1500 would have been covered. I doubt other dental plans do much better. We don't carry dental insurance.
- In addition to the active-duty years, remember that your pension is usually free from state taxes.
- When you ER your TS is worthless-- unless you insist on getting a job.

So, gosh, I guess that $4M figure could wiggle a few hundred thousand either way!

Great analysis. I wish I'd had a user-friendly system like that when I had to give those retention talks...

[Eagle43]

Since I retired from USAF, and worked at defense industry with a lot of retired military, I don't know of a soul who regrets the 20+ years. Now, this statement is made after the 20 years are up, not during the career span. During the career, you will have to make your mind up to continue every so often. I did so reluctantly each few years, and now, I am quite happy that I did. Tricare Prime, a miniscule $460/year for my DW and me. If that's not cheap, well, we all gotta move to Europe/Canada. Dental care, OTOH, sucks..

[lets-retire]

I served just over 10 years. I looked at the long hours and the potential for promotions before getting out. The long hours left me earning the equivelant of 32000 per year after 10 years. If I had stayed in I would have gone up to about 35000. That's with a degree. I easily found another job in the civilain world that paid that much, without the TDY's.

My advice is to concentrate on the job at hand and don't forget the politiking. You might not have the rank, but if your frinds with the right people then you can get the job. As an officer your jobs are your lifeline, and will earn you the promotions. On the enlisted side your jobs are irrelevent, until the top 2. The health care sux. I can give you numerous examples of poor military health care. I have found the civilian side to have better care only in the fact that if you have decent insurance the doctors are more than willing to treat the problem not just the sympotms.

Do not look at the entire career and decide now. Take it one assignement at a time. It is much easier to look at it as a 4 or 6 year commitment than a 20 year commitment. Even in the private industry how many people look at their company and decide they will work for 20 or 25 years. Most of the time they look at it as I will work here until it sux or a better offer comes along.

Either way if you get out look hard at the Reserves, at least you won't lose any time toward your retirement if you sign on for the Reserves. I always approached my job as a 20 year gig. The way I figured it if I wanted to serve longer than 20 then I didn't train hard enough.

[lets-retire]

Something I forgot, don't count on much more than a retirement chek if you do decide to stay the course. Congress and the President ahve a bad habit of fooling with the benefits of retirees. My father spent 24 years in the AF and when he retired discovered half of what he was promised had been changed or deleted. I chose to take another government job essentially for the medical, because the medical he was promised had been seriously cut.

[otako]

Quote:

I served just over 10 years. *I looked at the long hours and the potential for promotions before getting out. *The long hours left me earning the equivelant of 32000 per year after 10 years. *If I had stayed in I would have gone up to about 35000. *That's with a degree. *I easily found another job in the civilain world that paid that much, without the TDY's. My advice is to concentrate on the job at hand and don't forget the politiking. *You might not have the rank, but if your frinds with the right people then you can get the job. *As an officer your jobs are your lifeline, and will earn you the promotions. *On the enlisted side your jobs are irrelevent, until the top 2. *The health care sux. *I can give you numerous examples of poor military health care. *I have found the civilian side to have better care only in the fact that if you have decent insurance the doctors are more than willing to treat the problem not just the sympotms. Do not look at the entire career and decide now. *Take it one assignement at a time. *It is much easier to look at it as a 4 or 6 year commitment than a 20 year commitment. *Even in the private industry how many people look at their company and decide they will work for 20 or 25 years. *Most of the time they look at it as I will work here until it sux or a better offer comes along. * Either way if you get out look hard at the Reserves, at least you won't lose any time toward your retirement if you sign on for the Reserves. *I always approached my job as a 20 year gig. *The way I figured it if I wanted to serve longer than 20 then I didn't train hard enough.

You have to consider the whole package and what you want to do with your life. *In my mind if you stay for 10, why not stay for 20? *Of course you make more money in the private sector. * But, your half way to getting a guranteed paycheck and never having to put up BS again in your life.

The way I feel right now, if I reached the half way point, I would of stayed in the force for the full 20 years and packed my bags for Costa Rica or Thailand. *I just need the basics: place to stay, health care, food, and spending cash. How much you make after that point is of no consequence to me. *You only have x amount years before you die. *The extra money can't buy you more time. *I rather spend my time outside of cubicle.

Now, it's totally different story if you just do one tour. *You don't have that much invested in the situation.

As for the chance of the government messing with your pension, I'd rather take my chances with a guranteed pension than risk it with private company or stock market. *You would have to save a ton money to get equivalent of military pension in the private sector.

Nothing guranteed in life but at least the fed's have a good records with retirement benefits. *My dad did great with AF service.

[otako]

Quote:

rofl -- I was just thinking about the old observation that there were no virgins in the military. Have you been 'talking' to a recruiter? For AF, 8 yrs O3 and 4 yrs O4. <Army?> Value of space-a travel - good luck, especially after retirement. Examples: cost of room waiting for space to be available - cancelled reservation cost - cost one way ticket back when you get stuck or diverted. Savings maybe - ulcers worrying about all the ways you could be $#@%^, if the moon isn't in the 7th house and jupiter doesn't align with mars. I used a few times on active duty, to get back and forth to overseas assignments, I wouldn't have had if I weren't in the service. My normal value for this is -0-... VA loans - Savings? If you have 20% down, conventional usually cheaper. -0- Security Clearance value, if you really retire zero. Exagerated even if you take a job out of the service requiring the clearance. Ask for that 6 figure signing bonus for having a clearance and wait for the laughter to stop. -0- for ER -- Maybe $10-20k bonus for SBI and higher for job out of service. (Maybe just help get you job vice someone w/o)... GI Bill value possibly zero again. Will probably cost you time & money to use... TA for masters and GI bill top off maybe. Probably need for O4/5 promotion... Real Value already built into career projection... I paid for GI bill - no use -- value negative for me... But it was an investment. Retirees pay big for dental insurance and coverage is limited. Also pay for Tricare Prime. There's some savings depending on just how sick your family and you get. Give me a half mill and I'll pay back everything we've used or will use... Sales tax - commissary maybe some savings if available -- who know's - we do alot of shopping elsewhere, almost none at the exchange. Some don't use at all after retirement. Six figures in sales tax is a definite stretch... Requires ~$3million spent in the exchange. lol VAlue of extra holidays and leave is probably negative -- against extended hours, weekends, deployments etc. I'm sorrrry - maybe this was my fault... The value of a career is verrry high, buttttt your values will undergo alot of tweaking in the next ~60 years... Good Luck... BTW: Value retirement actually ~25X (vice 39X) based on 4% SWR. BBTW: The actual value of various benefits can vary widely for each military member. The annual compensation sheets were a great place to start and more accurate than some believe. I usually tweaked it and came up with an even higher number. Shh don't tell anyone. BBBTW: My countdown spreadsheet was less esoteric, projected pay/allowances, savings, debt, ret pay... Not sure if I have it anymore and it's at least 3 yrs out of date. Luv those pull down features in excel.

I would say the GI Bill is more like insurance for career change just in case things don't work out.

I've heard stories of careers ended in the force for realtively minor stuff. *As a officer, your always under microscope. *Your superiors have so much power to kill your career by giveing you a bad officer performance report. * If you didn't shine Col XX boots the right way, you could slighted at the opr for minor stuff.

[otako]

Air Force my friend! The only way to fly friendly skies!

[lets-retire]

I don't know if they still do it the same, but I had to attend a briefing with the director of AFPC one time. *She went inot great detail on how assignements were given out as well as promotions. *The way I understood the assignments for the officers was they essentially send out their "resume" to the gaining unit, who then selects who gets the position. *Essentially if your a good officer and you have worked for a commander you could be working for the same person later in your career. *The other side of that is if you were a bonehead and the commander wants to kill your career they could select you just to screw you.

The politics for the officers seem to carry over to their entire life. *Your career can hinge on the actions of your pouse and children.

I still work for the government, only now it is a city with state retirement. After 15 years I will retire with a larger paycheck than I would receive from the military after 20. Yes I will have to work and extra 5 years, however I won't go to jail for shooting some idiot boss who decided they wanted to gain as much rank as possible and never learn the warrior side of the job. Those people put the entire mission my life and those of my troops at risk. I couldn't stomach the amount of covering one's butt that was going on. The self promotion at the expense of developing real combat capabilites was scary.

The 15 year mark is when the kid should have completed his second year of college. I figure that sould be a good time to retire. It gives me two years after he his partially self supporting to pay any remianing debt off. I will be funding his college costs prior to him actually attending with a prepaid program.

[newellcr]

Otako,

Interesting numbers. I'm not sure adding everything up over your lifetime really shows you much. You asked if it was worth it to stay for the ~retirement~. If I divide your retirement number by 39, I get roughly $39,700/yr. Sounds high to me, but I'm not that familiar with the military so let's use the numbers. I'd re-look your health and dental numbers. $100/yr for dental insurance doesn't seem right.

What is the retirement worth? A really rough cut on the pension numbers, gives you a value of $2200/mo for 20 years of service. $39700/yr divided by .04/yr swr give you $1mil. From the handy-dandy "How $100 a month will grow" chart, 6%(real return rate) over 20 years give $45,565. Divide the $1mil by $45565, this gives you about $2200/mo. Save $2200/mo ($26,400/yr) and you can create your own military pension without health benefits. This gives you an approximation of what the pension is worth when you compare it to making more $ outside the military.

Nothing's apples and apples, here. You need to stay/make it for your 20, make your 0-5, etc. For fun, let's say you are contemplating leaving after 5 years for $35000/yr more salary. You've already done 5 years but will get nothing if you leave. The handy dandy chart now reads for 15 years, $28831. This means your $39,700/yr pension is now worth $3400/mo or $41,600/yr again without health benefits. IMO this makes the extra $35000/yr, that you will be taxed on, worth a bit less. Add in your numbers for health benefits and the other perks that you value and you will have numbers specific for you.

Good luck,

Chris

[otako]

Actually it's not high considering the number are calculated at a 0-5 retirement. *Military retirement is bascially 50% of base pay. *Now, I didn't include the step increases so it's probably worth it bit more.

As for making your own military retirement, I wouldn't say it's impossible but saving 26k a year is lot of money. *Getting out of the service, I would expect a starting salary of around 40's to 50k in the private sector.

Come to think of it, I've never met anyone who managed to ER without a government or military pension. *The amounts required to ER at early age are just to high for average to save enough money.

[Nords]

Gosh, I really miss these retention debates. *They used to occupy us for many long, boring hours of watchstanding...

Quote:

You asked if it was worth it to stay for the ~retirement~. *If I divide your retirement number by 39, I get roughly $39,700/yr.

With the current pay tables and High-3 retirement system, an O-5 retiring with 20 years of service would receive a $39,315/year pension (before fed taxes).

Quote:

I'd re-look your health and dental numbers. *$100/yr for dental insurance doesn't seem right.

It's not. *I've been wondering how those dental numbers were created too; I don't even think active-duty sponsors can get those rates for just a spouse or one kid anymore. *But the other numbers seem close enough.

Quote:

What is the retirement worth? *A really rough cut on the pension numbers, gives you a value of $2200/mo for 20 years of service. *$39700/yr divided by .04/yr swr give you $1mil. *From the handy-dandy "How $100 a month will grow" chart, 6%(real return rate) over 20 years give $45,565. *Divide the $1mil by $45565, this gives you about $2200/mo. *Save $2200/mo ($26,400/yr) and you can create your own military pension without health benefits. *This gives you an approximation of what the pension is worth when you compare it to making more $ outside the military.

Yes, but the military pension also includes a COLA indexed to CPI-U (same as the SS COLA). *And in most states, military pensions aren't subject to state taxes. *Transitioning to a corporation as a junior officer usually involves a huge pay cut that isn't overcome until 5-10 years of experiences & raises. *So for quite a few years of potential compounding, there might not even be any savings from leaving the service. *OTOH a smart entrepreneur in the right industry at the right time can make six figures in a year or two. *There are plenty of stories to support both sides of the issue.

Quote:

You've already done 5 years but will get nothing if you leave.

IMO this is the big advantage of the Reserves. *You start with full retirement credit for your active-duty time and you can add to that as much as you're willing to work. *Your retirement is delayed until age 60 but you still salvage a benefit from that invested time.

Most veterans leave active duty when they can't stand a combination of the people, the working conditions, or the assignment policies-- and because there's not enough hours in the day to juggle all those problems.

The Reserves gives you an opportunity to find a situation that works for you-- on extended active duty or drilling weekends or even just completing correspondence courses. *You can generally shift from one to another with little notice (although much paperwork). *You don't even have to stay in the same service. *The Navy side is extremely mobile for the junior ranks; people come & go as their personal situations change (or if they don't like the new CO). *I think the Reserve lifestyle offers 85% of the good stuff and only 15% of the bad stuff instead of the active-duty full load of both.

But Otako, you have to do your own due diligence. *(That's why I regret not learning more about it when I was a disgruntled JO.) *The old Cold-War Reserves model is mutating into one that theoretically includes mobilizations for a year out of every five. *That may not apply to your part of the USAF or it may be even worse. *You have to find a niche that works for you while avoiding setting yourself up for failure...

[newellcr]

Nords, I missed my calling as a recruiter.

Otako, it looks like you will be earning about $50k/yr as an O3. I don't know if this includes your housing stipend and other add ons or not. After taking a look at the pay tables, a lot is starting to make sense about conversations that I've had with Major and Major Smith.

Cheers,

Chris